Sunday, 3 May 2009

Are the Conservatives still Thatcherite ... on inequality?

Mrs Thatcher ... explicitly did not believe in the pursuit of equality. "The pursuit of equality is itself a mirage," she said, in a speech before she became prime minister. "Let our children grow tall, and let some grow taller than others if they have it in them to do so."

The official line of the "progressive Conservative" Cameron modernisers is that this issue of equality and inequality is the issue on which they differ from Margaret Thatcher. (Indeed, those who style themselves as compassionate conservatives often claim that greater inequality was an unfortunate and unanticipated by-product of Thatcher's economic modernisation, which rather overlooks that this was not what was argued at the time).

Oliver Letwin has said that "“inequality matters. Of course, it should be an aim to narrow the gap between rich and poor. It is more than a matter of safety nets”.

She was not interested in how people were doing compared with others — she thought this was the politics of envy. I remember doing some calculations for her which showed that the value of unemployment benefit in the 1980s was not much below average male earnings after the war. So what were people complaining about? Now the work of people like Michael Marmot and Richard Wilkinson has persuaded me that inequality matters too. There are of course limits to what governments can do, especially about the petty differences between us and people we know, which are often the inequalities people worry about. Nevertheless in dismissing all this as just the politics of envy we showed we did not understand something which does affect wellbeing.

Back then we just assumed that there was a robust British society and all that had gone wrong was that statist economic policies had messed up the wealth producing bit, but when that was sorted people would stop being so angry about things. Now, even at the bottom of a recession, the social question looms much larger than we thought then.

Willetts went further than this back in March, claiming this not just as his own view but as that of party which he thinks now gets why inequality matters.

Many think the idea of 'relative poverty' is a twisting of the language.

If the party leadership no longer think that, it is an argument they might struggle to win. It may be one they are less interested in winning, in changed economic circumstances, as David Cameron has become noticeably more willing to embrace the Thatcher legacy than it once was.

Time will tell how far this was a substantive shift, rather than a well mannered tribute to a historic anniversary which much of the party understandably cherishes.

It would be good to hear more from Conservatives about whether and how they think conservatism does involve thinking that inequality itself matters.

Thatcher’s ‘Let our children grow tall’ speech attacked the representation of equality as a single issue goal, the means being a ‘programme of impoverishment [of the more well off] through the medium of the state’. Equality of outcome was, in her terms, a mirage. So the correct social choice wasn’t ‘the redistribution of wealth and incomes’ but ‘the noble ideals of personal responsibility’. Fundamental to this thesis was the idea that ‘socialising the National Income’ was neither an appropriate nor a worthy thing to try to do.

All of which is actually not a million miles away from Blair’s soundbites (during his 2002 Conference speech, for example) about ‘equality of both opportunity and responsibility’, about replacing the ‘paternalistic’ welfare applied by the ‘big State’ with ‘the enabling State’ precisely because ‘there is no way government through the general taxpayer can do it all’. And typically, disingenuously, having changed an inherited goal with nothing coherent to put in its place, Blair misrepresented this as ‘dividing means and ends’ as though opaquely referencing Lenin. What he meant was privatisation through the PFI chimera.

The poverty gap (pace Jack Straw and the OECD statistics which unreassuringly show how, even though our position had improved along with those of Mexico and Greece, the UK remained, in 2005, quite stubbornly unequal) is not an ideal measurement of how wealth is being distributed. And it ignores, of course, the causes of any change. Moreover, if the task of New Labour was actually, as Blair said it was, one of ‘developing human potential’, then any improvement is also epiphenomenal and credit cannot be claimed.